Telemedicine company CEO pleads guilty in $424M fraud scheme

The owner and CEO of a telemedicine company pleaded guilty Sept. 6 for his role in a $424 million fraud scheme, which is part of one of the largest healthcare scams ever prosecuted by the Department of Justice.

Lester Stockett, owner of the Video Doctor Network and CEO of AffordADoc, pleaded guilty to one count of conspiracy to defraud the U.S. and pay and receive healthcare kickbacks, and one count of conspiracy to commit money laundering.

Mr. Stockett made several admissions as part of his guilty plea. He admitted that he and others agreed to solicit and receive illegal kickbacks and bribes from patient recruiters, pharmacies, medical equipment companies and others in exchange for arranging for physicians to order medically unnecessary orthotic braces for Medicare beneficiaries.

Mr. Stockett was one of 24 defendants charged in April for their alleged roles in the $1.2 billion scam. According to federal prosecutors, the complex scheme began with telemarketers calling Medicare beneficiaries and getting them to accept free or low-cost durable medical equipment braces, regardless of medical necessity. The call centers would transfer Medicare beneficiaries to telemedicine companies for consultations with physicians, who allegedly prescribed the orthopedic braces to patients whom they had never met. The call centers would sell the prescriptions to DME companies, which shipped the braces to beneficiaries, billed Medicare and paid kickbacks to physicians.

In connection with his guilty plea, Mr. Stockett also admitted he and other Video Doctor Network executives schemed to defraud investors and conspired to engage in domestic and international money laundering, according to the Justice Department.

As part of his plea agreement, Mr. Stockett agreed to pay the federal government $200 million in restitution and forfeit certain assets tied to the fraud scheme.

Mr. Stockett's sentencing is scheduled for Dec. 16.

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